CMA to investigate ASOS, Boohoo and Asda over ‘green’ claims
The Competition and Markets Authority (CMA) has announced plans to scrutinise eco-friendly and sustainability claims made by ASOS, Boohoo and George at Asda. The UK regulator has written to three firms outlining its concerns over misleading statements and language, seeking evidence to progress its investigation.
The development of its review will depend on an assessment of the evidence before it, however, the possible outcomes include: securing undertakings from the companies to change the way they operate, taking the firms to court, or closing the case without further action.
CMA’s investigation will include considerations on the ‘statements and language’ used by the businesses, and whether they are too ‘broad and vague’, consequently misleading customers on sustainability credentials. For example, Boohoo’s ‘Ready for the Future’ range.
According to Boohoo, clothing under this line contains at least 20 per cent ‘better materials’, such as recycled fibres, organic cotton or responsibly sourced viscose. However, the company’s advertisements for the range have been criticised, including claims that customers can ‘see the product’s material composition’ and how it meets the range’s criteria on the retailer’s web pages. An investigation by the i Paper found that product details for certain items in fact offer no such information.
The authority also says it will inspect whether the criteria used by the businesses to decide on products’ inclusion within ‘sustainable’ collections are lower than customers might expect. For example, collections touting recyclable material may contain as little as 20 per cent recycled fabric. CMA further notes that some items may be included in these collections when they do not meet the criteria.
The investigation will also consider whether firms are failing to provide customers with sufficient information about products included in their ‘eco-ranges’, omitting information on what the fabric is made from. The use of fabric accreditation schemes and standards will fall within the remit of the investigation, with the CMA looking at whether there is a lack of clarity over schemes applying to particular products, or to the firm as a whole.
Earlier this year, the validity of fashion certification schemes was called into question by the Changing Markets Foundation, which published a report claiming that they ‘enabled greenwashing.’ Analysing ten schemes, the report found ‘no scheme to be fit for purpose.’
The authority initially reviewed the fashion sector in January, identifying concerns around potentially misleading ‘green’ claims. These included companies creating the impression that their products were ‘sustainable’ or better for the environment ‘with little to no information about the basis for those claims or exactly which products they related to’.
This followed the CMA’s publication of its Green Claims Code – aiming to help businesses understand how to communicate their green credentials while avoiding the risk of misleading shoppers. An international analysis of websites found that 40 per cent of green claims made online could be misleading, the competition authority disclosed.
The current wider investigation into misleading environmental claims is ongoing and other sectors will come under review in due course.
In Europe, MEPs and governments have recently reached a provisional agreement on new, compulsory reporting rules. From 2024, large companies will need to publicly disclose information on the way they operate and manage social affairs, governance and environmental risks.
This followed the European Commission’s proposed updates to EU consumer rules, which aim to obligate producers to provide information on products’ durability and reparability and ban ‘greenwashing’ practices.
Sarah Cardell, Interim Chief Executive of the CMA, said: “People who want to ‘buy green’ should be able to do so confident that they aren’t being misled. Eco-friendly and sustainable products can play a role in tackling climate change, but only if they are genuine.
“We’ll be scrutinising green claims from ASOS, Boohoo and George at Asda to see if they stack up. Should we find these companies are using misleading eco claims, we won’t hesitate to take enforcement action – through the courts if necessary.
“This is just the start of our work in this sector and all fashion companies should take note: look at your own practices and make sure they are in line with the law.”